Financially Fit: Savvy tips
Here are some savvy tips to help you make smart choices when it comes to finances.
How to ask a family member for a loan
Do you need to borrow money? Do you want to ask a family member for help but don’t know how to go about it? If so, here are some tips on how to ask.
Go to someone you trust
Before asking a distant cousin for a loan, try asking a family member who’s close to you like a parent or sibling. Someone who knows you well will likely be more inclined to help.
Arrange an in-person meeting
It’s best to ask for a loan in person. This way you can discuss the amount you need and why you need it. Remember to be specific and, if possible, bring documentation to show how the money will be used.
Put together a proposal
Be prepared to let your family member know how you plan to pay them back and when. You may also want to talk about why loaning you the money is a safe investment. For example, you could highlight:
Your reliability
The profitability of your endeavour
The profitability of your past endeavours
Your experience
The interest you’ll pay
In addition, share your plan for what you’ll do if you have trouble paying back the loan. By doing so, you’ll reassure your loved one that their money is safe and you’ve considered their interests.
To make the transaction official, it’s a good idea to sign an amicable or notarized agreement. A lawyer or notary can help you create this type of document.
3 common financial no-nos to avoid
If you recently started managing your own money or simply want to improve your financial situation, it’s important to be careful. Here are three common mistakes you should avoid.
1. Not saving money every month
If you forget to put money aside every month, consider setting up automatic withdrawals. By doing so, a certain percentage of each paycheque will be transferred directly into your savings account.
2. Paying off only the largest debt
In the long run, making payments on only your largest debt can cause you to pay more in interest and stay in debt longer than you need to. Instead, focus on paying off your high-interest debts first.
3. Not having an emergency fund
If you have an emergency fund, it’ll ensure you have a safety net to fall back on if you unexpectedly fall ill, get in a car accident or lose your job. Experts recommend saving at least three months’ worth of basic living expenses.
If you’re struggling to manage your money, make an appointment with a financial expert for personalized advice and assistance.
Financial tips for new parents
If you recently welcomed a new member to your family, you may be feeling some degree of financial stress. To avoid money woes, now and in the future, make sure to do the following.
Have an emergency fund. Ideally, your emergency fund should contain at least three months’ worth of living expenses. This will ensure you can provide for your family in the event you fall ill, get into an accident or lose your job.
Review your budget. In some cases, you may need to make changes to your budget (for example, if one partner is no longer earning an income). Therefore, it’s a good idea to reassess your cash inflow versus outflow and make any necessary adjustments.
Start saving now. If possible, start putting aside money for your child’s education right away. Compare different contribution plans so you can choose the one that offers the most benefits.
Focus on cutting costs. There are many ways to save on the items you need for your baby. For example, it may be more cost-effective to purchase reusable diapers than disposable ones. In addition, you might want to purchase big-ticket items like the stroller and crib second-hand.
For more personalized advice, consult a financial expert in your region.
3 questions to ask before switching home insurance plans
Are you moving or simply unhappy with your current home insurance policy? If so, here are three questions to ask yourself before making a switch.
1. Do you have all the relevant information?
Any insurance company you approach for a quote will ask you a series of questions to determine what policy will best suit your needs. These questions will likely require you to know the size of your home, the flood risk for the property, the type of heating system that’s installed, the total value of your belongings and more.
2. Will you be charged for terminating your current insurance policy?
You can cancel or change your home insurance policy at any time. However, you may be charged an administrative fee if you do. Ask your current insurer about their termination fees and procedures so you know this information before signing a new contract.
3. Will you require additional coverage?
Every home insurance policy has its limitations, and it’s important to accurately assess the value of your belongings to determine whether they’re covered under the basic plan. In some cases, you may need to purchase additional coverage. For example, pricey items like tractors, snowblowers, antiques and jewelry often require specialized coverage.
If you have any questions about home insurance or you want to learn more about the available policies, contact an insurance broker near you.